FDIC Law, Regulations, Related Acts

4000 - Advisory Opinions

Decedent's IRA, of which Spouse Is Beneficiary, Is Separately
Insured from Spouse's Own IRA Held at Same Depository Institution

FDIC-91-20

March 21, 1991

Mark A. Mellon, Attorney

I am writing in response to your letter dated March 1, 1991. In
your letter you state that you own two Individual Retirement Accounts
("IRAs"), one in your name and one account established by your
deceased husband of which you are the beneficiary. You indicate that
the combined total of these two accounts exceeds $100,000. Your
question is whether these two accounts are fully insured.

The rules governing deposit insurance coverage on individual
retirement accounts provide that the interests of any one natural
person in time and savings deposits in an
insured depository institution shall be
added together and insured up to $100,000 in the aggregate. 12 C.F.R.
§330.13(a). This insurance coverage would be separate from, and in
addition to, any other individual retirement accounts established by
another individual on which you are named as beneficiary. The person
who establishes an IRA account is the owner of the deposit during his
or her lifetime and is insured up to $100,000 as to all IRA funds he or
she deposits in time and savings accounts at any one insured bank,
separately from the $100,000 limit applicable to such person's non-IRA
deposits at the same bank. When the person who set up the IRA account
dies, the beneficiaries previously designated by the deceased depositor
become the vested beneficial owners of the IRA funds and are then
separately insured up to $100,000 as to the IRA funds owned by each
such beneficiary at the same bank. Therefore, the funds in your IRA
account would be insured up to a maximum of $100,000. With regard to
your deceased husband's individual retirement account of which you are
the beneficiary, your interest in this account is insured up to
$100,000, separately from the IRA established in your name in the same
depository institution. If, however, you should elect to treat your
interest in your husband's account as your own IRA for federal income
tax purposes, then the funds in this account would be added to your IRA
and insured in the aggregate.

I hope this information is helpful to you. If you have any further
questions, I can be reached at (202)
898-3854.